Sponsor
Alderman Friedel
Title
City of Racine, Wisconsin Initial Resolution for Revenue Bonds which also constitutes a resolution declaring official intent to reimburse expenditures on the project with proceeds of a tax-exempt borrowing
WHEREAS, the City of Racine, Wisconsin (the “Municipality”) is authorized by Wisconsin Statutes Section 66.1103 (the “Act”) to issue Bonds to finance costs of certain projects including manufacturing facilities; and
WHEREAS, bonds issued pursuant to the Act are to be payable from amounts paid under a revenue agreement (as defined in the Act) relating to the project being financed and not from tax revenues or other funds of the Municipality; and
WHEREAS, Premier Aluminum, LLC, a Delaware limited liability company (the “Borrower”), wishes to pursue the construction of improvements to an existing facility owned by the Borrower in the Municipality, construction of an addition to the facility, acquisition and installation of equipment for such facility and addition and related improvements (the “Project”) for use in connection with the business of manufacturing permanent mold aluminum castings and related manufacturing and service activities; and
WHEREAS, the Borrower has asked the Municipality to indicate its intention to provide financing under the Act for all or a portion of the bonds and the Project before it proceeds; and
WHEREAS, the Borrower also has presented the Municipality with evidence of its intention to reimburse itself for expenditures relating to the Project which it pays with funds which are not the proceeds of revenue bonds issued under the Act; and
WHEREAS, the Borrower expects the reimbursement to be funded with the proceeds of qualified small issue private activity revenue bonds which will constitute reimbursement bonds to be issued on its behalf with respect to the Project and has indicated that it does not expect the aggregate principal amount of any bonds to be issued for the Project to exceed $7,000,000; and
WHEREAS, the Borrower has represented that it expects that sixty-nine jobs are expected to be maintained at the Project site and twenty-four jobs are expected to be created at the Project site as a result of the Project and the Project is not expected to affect employment at any other locations in Wisconsin operated by the Borrower; and
WHEREAS, the Project will benefit the Municipality.
NOW, THEREFORE, IT IS RESOLVED:
1. The Municipality hereby declares its intent to assist the Borrower with respect to the financing of the Project by issuing the Bonds (the “Bonds”) in one or more series in an amount not to exceed $7,000,000 and, under Treas. Reg. Sec. 1.150-2, to reimburse any expenditures made on costs of the Project prior to issuance of the Bonds with proceeds of the Bonds.
2. To encourage the Borrower to undertake the Project, the Municipality will pursue a financing plan (the “Financing”) under which it will:
(a) sell to one or more purchasers procured by the Borrower bonds under the Act;
(b) enter into one or more revenue agreements with the Borrower providing the Municipality with revenue sufficient to pay the principal of, premium, if any, and interest on the Bonds when due and requiring the Borrower to provide the portion of the Project to be financed with the Bonds; and
(c) assign any revenue agreements to the holders of the Bonds or to a trustee for their benefit and enter into any other appropriate arrangements requested by the Borrower to further secure the payment of the Bonds.
3. The Bonds shall never constitute an indebtedness of the Municipality within the meaning of any state constitutional provision or statutory limitation and shall not constitute or give rise to a pecuniary liability of the Municipality or its officers or a charge against the Municipality’s general credit or taxing powers.
4. The appropriate officers of the Municipality are authorized to negotiate the terms of the Financing and all related documents. The terms of the Financing and all related documents will be subject to this Resolution and the Act and will not be binding until:
(a) the details of the Financing and the issuance of the Bonds are approved and authorized by further resolution of this Common Council;
(b) the electors of the Municipality have been given the opportunity to petition for a referendum as required by the Act and either (i) no petition is timely filed or (ii) if a petition is timely filed, a referendum approves the issuance of the Bonds;
(c) all documents required in connection with the Financing have been duly executed and delivered by the parties; and
(d) the Borrower has made arrangements for payment of all fees and costs of the Municipality, including attorneys’ fees.
5. The City Clerk is directed to
(a) publish the Notice to Electors in substantially the form attached to this Resolution as a class 1 notice under Wisconsin Statutes Chapter 985, in a newspaper eligible to make such publication for the Municipality; and
(b) file with the Secretary of the Department of Commerce of the State of Wisconsin a copy of this Resolution and a copy of the Notice to Electors.
Information with respect to the job impact of the Prjoject will be available at the time of consideration of the initial resolution.
Fiscal Note: N/A